FuelCell Energy May Offer Huge Upside Reward

| About: FuelCell Energy, (FCEL)
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FuelCell Energy (NASDAQ:FCEL) engages in the development and manufacture of fuel cell power plants for electric power generation primarily in the United States, Canada, Germany, Japan and South Korea. Its core carbonate fuel cell products include Direct FuelCell or DFC Power Plants for stationary power generation applications. The company also develops carbonate fuel cell and planar solid oxide fuel cell technology. Its proprietary carbonate DFC power plants electrochemically produce electricity directly from readily available hydrocarbon fuels, such as natural gas and biogas fuels. The company serves manufacturers; mission critical institutions, including correction facilities and government installations; and hotels and customers, such as breweries, food processors and wastewater treatment facilities, who use renewable gas for fuel.

Key Developments:

FuelCell Energy, Inc. Announces Joint Development Program for a Small Scale Direct FuelCell Power Plant
November 30, 2010

FuelCell Energy, Inc. announced that it will jointly develop a small-scale Direct FuelCell (DFC) power plant with its South Korean partner, POSCO Power. The power plant will target the fast-growing commercial applications market segment, particularly in Asia. POSCO Power will fund the $5.8 million program in stages as performance milestones are reached, with an initial funding of $2.9 million for design and development of a smaller scale fuel cell stack.

FuelCell Energy, Inc. Announces Contract To Demonstrate 300 kilowatt DFC300 Power Plant At U.S. Army Base Camp Parks
November 18, 2010

FuelCell Energy, Inc. announced a contract with the U.S. Department of Defense (DoD) administered by the U.S. Army Corps of Engineers' Engineer Research and Development Center, Construction Engineering Research Laboratory (ERDC-CERL), to relocate, install and service a DFC300 fuel cell power plant at U.S. Army Camp Parks Reserve Forces Training Area located in Dublin, California. The project will involve the relocation and installation of a DFC300 power plant owned by the DoD that was operated at another military base under a one year demonstration program. The fuel cell power plant will provide power to an electrical sub-station on the Base, replacing electricity currently supplied by the commercial electric grid. Site preparation will begin in late 2010 and the power plant is expected to be operational by the summer of 2011.

FuelCell Energy, Inc. To Provide Renewable Baseload Electricity For Municipal Wastewater Treatment Facility
November 11, 2010

FuelCell Energy, Inc. announced the sale of a 1.4 megawatt (MW) DFC1500 power plant to be installed at the San Jose/Santa Clara Water Pollution Control Plant in San Jose, California. UTS Bioenergy LLC will purchase the DFC1500 and sell the power generated to the San Jose/Santa Clara Water Pollution Control Plant under a 20-year power purchase agreement. FuelCell Energy will service the power plant under a long term service agreement and the unit is expected to be operational in early 2012.

FuelCell Energy, Inc. To Supply 4.5 Megawatts Of Power Plants For Renewable Directed Biogas Project In San Diego, California
November 4, 2010

FuelCell Energy, Inc. announced the sale of 4.5 megawatts (MW) of power plants to BioFuels Fuel Cells, LLC, a California renewable energy company owned by New Energy Capital and BioFuels Energy, LLC. Three fuel cell power plants, including a 2.8 MW DFC3000, a 1.4 MW DFC1500 and a 300 kilowatt DFC300, will be installed at three different locations in the San Diego, California area and will utilize purified biogas from the Point Loma wastewater treatment plant as the primary fuel source for the generation of ultra-clean electricity. The City of San Diego will convert a waste problem into a revenue stream through this directed-biogas project.

FuelCell Energy, Inc. Announces Sale Of 1.4 Megawatt DFC1500 Fuel Cell Power Plant
September 27, 2010

FuelCell Energy, Inc. announced the sale of a 1.4 megawatt DFC1500 fuel cell power plant to the Rancho California Water District in southern California. Electricity from the fuel cell will power a pumping station located in Temecula, California. FuelCell Energy will service the power plant under a multi-year service agreement. The plant will use natural gas as fuel and is expected to be operational by late 2011.

Out: December 10, 2010
Canaccord Genuity maintains a 'Buy' on FuelCell Energy - PT $4.50

Canaccord analyst says, "We maintain our rating heading into the Q4 call given solid order momentum in California and expectations for another “anchor order” out of POSCO within the next several quarters. As always, inherently lumpy order intake and a notable quarterly cash burn keep the risk profile elevated, in our view."

"That said, we keep our near term outlook tempered, as we look for 1) improved clarity out of Connecticut (43.5MWs awaiting financing) and POSCO (expected double-digit order flow by H1/11), 2) continued progress on cost-reduction efforts and 3) an update on European partnership discussions."

I believe FCEL will easily beat on earnings given the recent developments. Investors could very well see a substantial upside move next week. Short sellers would be smart to cover before the earnings report out on Monday December 13, 2010, after the close. I will be excited to listen in on FCEL's conference call on Tuesday, December 14, 2010. The current earnings estimate is for a loss of $0.14. Watch for FCEL to possibly trade into the $1.60 area ahead of the earnings report.

FCEL chart is showing strong money flow moving in along with institutional buying. FCEL had a 52-week high of $4.02 on Jan 4, 2010.

Disclosure: I am long FCEL.

Additional disclosure: I may change my opinion along with my investment position depending on FCEL's earnings.